Scam-hit Punjab National Bank incurs heavy losses in fourth-quarter

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PNB

The state-owned Punjab National Bank (PNB) on Tuesday reported a net loss of Rs 13.416.91 crore in the fourth-quarter ending March FY18, as bad loans surged.

The bank had posted Rs 261.90 crore profit during the same phase previous year.

The PSU lender said it made provisions and contingencies worth Rs 20353.10 crore for the quarter ended March. This was against Rs 4466.68 crore provisions it made in the third-quarter and Rs 5753.71 crore in the year-ago period.

Gross non-performing assets (NPAs) spiked to 18.38 percent in Q4 from 12.11 percent in the quarter ending December and 12.53 percent in the corresponding quarter last year.

On the fraud front, the bank said the matter is under investigation.

The lender said the liabilities on account of LOUs/FLCs, which became due up to March 31 amounting to Rs 6586.11 crore have been paid by the bank on the Undertaking of concerned banks.

Moreover, the bank has created liability in the books in respect of LOUs/FLCs which were due after March 31 amounting to Rs 6959.79 crores. The bank will make payments to the concerned banks on the due dates of LOUs/FLCs, PNB said.

“During the quarter ended March 31, a fraud was detected at Brady House, Mumbai Branch of the bank involving certain accounts under gems & jewelry sector where through apparent connivance between these entities and few employees of the bank, some Letters of Undertaking (LOUs) or Foreign Letter of Credit (FLCs) were issued fraudulently and in unauthorized manner to certain overseas branches of Indian banks through the misuse of SWIFT system of the bank, which was then not integrated with CBS,” PNB said in a press release.

As per CBI chargesheet, top officials of PNB ‘misrepresented’ the factual position on letters of understanding (LoUs) to the RBI and ignored its warnings after not following its guidelines when over USD 2 billion were fraudulently cleared by its branch in Mumbai, a media report said.

Also Read: Federal Bank falls 43.5 percent in Q4 net profit

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